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Business Investment Loans
Find and compare from a range of loan offers with Savvy to help you invest further in your business today.
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The features and benefits of business investment loans
Competitive interest rates
By comparing a multitude of offers, you can take advantage of fierce competition in the market and lock in a low business loan interest rate in Australia for your business.
Borrow from $5,000 to $500,000
Business loans are designed to be versatile for needs big or small, so you can enjoy a vast borrowing range when considering different loans and choosing one which fits your requirements.
Repay over three months to five years
You can also choose a repayment term over which your business can most comfortably cover its repayments, with both short turnarounds and longer periods available.
No security required
There’s no requirement for any form of security to be attached to the loan, making unsecured business loans a more viable option for small business operators without major assets.
Use the funds however you like
Perhaps the most appealing feature of business loans is that they can be used to invest in any area of your business you wish, from boosting cash flow to paying for inventory and everything else.
Diverse loan types available
You’re not just limited to standard business loans, either, with business lines of credit offering a flexible alternative that enables you to draw funds whenever you need them.
Types of business loan
The most common type of business finance, unsecured loans enable businesses to access the funds they need without attaching an asset to the loan as security. Some lenders may allow you to borrow up to $500,000 and, because there's no collateral, offer same-day approval.
If your business already owns valuable assets, such as property or expensive equipment, you may choose a secured business loan instead. These loans may increase your borrowing power beyond what an unsecured loan can offer and, crucially, typically come with lower interest rates.
Business loans don't always have to be worth hundreds of thousands. If you're operating a small business and need a boost to help you keep on top of your expenses or expand your company, you may be able to take out a loan starting from as little as $5,000 and unlock further capital.
Just because you don't have all the required documents for a standard business loan doesn't mean you're out of options. Low doc finance enables you to use alternative documentation, such as other business financials, in the application process to access the funds you need.
A commercial line of credit allows you to draw from your loan account whenever your business needs access to their funds, instead of managing a lump sum and repaying it like a regular loan. This can add flexibility to your finance arrangement, providing money when you need it.
Invoice finance presents another option to business operators looking to free up cash through outstanding invoices yet to be paid by their customers. Your invoice finance can either be invoice discounting or factoring, which present different options when it comes to your invoices.
A common reason for seeking out a loan is to purchase commercial equipment. You can do this either with an unsecured arrangement or one with the equipment itself as collateral, with the latter potentially increasing your borrowing power and lowering your interest rate.
With this finance, when your business purchases product, your supplier provides an invoice which you send to your financier and pledge to repay by a set date. From there, your supplier sells the invoice to your financier at a discounted rate, while you repay the full amount to your financier.
Under an inventory finance agreement, your lender pays your supplier directly for inventory, which allows it to be signed off and sent to you. From there, you can pay off your debt within a pre-determined period to your lender, which may be longer than the regular debtor period.
An overdraft facility is attached to an existing financial account belonging to your business, such as a transaction or savings account, and enables you to borrow up to a set limit after the account’s balance reaches zero. These overdrafts are repaid with interest, but only on what you use.
You may simply be in a position where your business needs a boost to its cash flow. If this is the case, there’s a range of stop-gap solutions which may be suitable for your situation, from standard unsecured loans to specialist cash flow loans, invoice finance or even an overdraft.
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How to reduce the spend on commercial investment loans
Compare your options with Savvy
The simplest and most effective way to help you save on your business loan is to ensure you consider as many different offers as possible in the comparison process. Fortunately, it’s easy to do this right here with Savvy, as we’re partnered with a range of lenders and provide you with the most important information you need for each loan deal.
The more loans you compare, the more confident you can be in your decision on which is the best for your business.
Supplement your loan with available cashflow
If your business is in a position to do so, you can reduce its overall debt by simply contributing some of its cashflow or savings towards a particular steep expense. Loans can be accessed for 100% or more of the value of any business cost which needs covering, but that doesn’t mean you have to pay for the whole thing with a loan if you’re able to contribute business funds.
Reducing the size of your loan will, in turn, reduce the interest and fees you may be liable to pay.
Display positive trading and credit histories
Another way to reduce the cost of your loan is to demonstrate to your lender that your business has built a comfortable, reliable history of operating. This may be showing consistent revenues over a period of years which puts it in a strong position to comfortably repay the loan without any hiccups.
Additionally, having proof of successful servicing debt in the past, such as other loan debts, credit card debts and those to suppliers is also likely to result in a reduced business loan interest rate in Australia.
Pay above the minimum each instalment
Many business lenders won’t penalise operators for contributing above the minimum required amount over each repayment. In doing this, you can reduce the amount of interest you’re set to pay by more sharply reducing the principal on which it’s calculated.
Additionally, getting this debt off your books sooner rather than later can help you get approved for further financing, as it can boost your credit score and show other lenders that your business is capable of comfortably managing its loan debts.
Supply loan security
Finally, if your business owns valuable assets such as equipment, or if you as an operator are willing to utilise equity in your home as collateral, you can access a secured business loan instead. These not only come with expanded borrowing ranges beyond seven figures but also lower interest rates and fees.
This is because lenders view them as posing a lesser risk, as they come with a built-in contingency plan should the business become unable to support its payments (which unsecured loans don’t).
Common business investment loan queries
The primary tax benefit for businesses when repaying their loans is that interest can be claimed as a tax deduction. If you’re able to do this as an operator, you can potentially save your business thousands of dollars each year which would’ve otherwise been spent on loan interest. Make sure you keep a thorough record of your repayments if you intend to claim your interest at the end of the financial year.
There are several key criteria which lenders will enforce on their loans as minimum qualification requirements for businesses and business operators. These include the following:
- You must have been in operation and trading for at least six months before your application (some raise this to 12 months)
- You must be generating a minimum of $5,000 in monthly turnover (although this varies more widely between lenders)
- You mustn’t have a history of defaults or bankruptcy and show a largely positive credit history
Yes – while most business lenders will require them to have been in operation for at least six months, there are specialist lenders who can offer startup business loans in Australia. These are generally much smaller in size (capped at around $30,000 in many cases) and come with higher interest rates to compensate for the increased risk.
Business loans can be turned around rapidly from the point of application, with approvals able to be offered within the hour and full processing and funding possible in as few as three. This makes them a highly useful option if your business finds itself in more urgent need of funds and requires a fast turnaround.
No – as business loans can be taken out without any attached collateral, you can borrow as much as your business is capable of comfortably supporting on a regular basis. This means that no deposit is required, although, as mentioned earlier, there are clear benefits to offering some of your business’ funds towards any expensive purchases or debts.
Technically, yes – however, you’re likely to find that commercial property finance is the better option to go with. This is because they’re available for larger amounts than unsecured loans, many of which won’t offer the sum you need, and offer far longer repayment terms of up to 30 years (although ten- to 15-year terms are more common). Most businesses wouldn’t be capable of covering the cost of a commercial property purchase within three to five years, so you’re probably better off looking at alternative options.
Yes – because business loans can be used for any business expenses, this also extends to investing in another business (or purchasing it outright). However, when it comes to purchasing or investing in another business, the process becomes more complicated and documentation requirements are expanded. Because of this, you may wish to seek out the help of a business loan broker, who can act as the intermediary between you and the lender and more accurately ensure you have all the right documents to complete the purchase with funding.
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